Daily COVID-19 cases showed an uptick but remained low. Following the full reopening of all social and economic activities and after more than two months of removing all entry requirements for foreign arrivals, daily COVID-19 cases inched up to nearly 2,000 in the last week of July from less than 1,000 cases in the first week of the month. 

Production continued to increase in July. The overall Index of Industrial Production (IIP) rose 1.6% MoM and 11.2% YoY in July, bringing IIP growth in 7M 2022 to 8.8% YoY. According to S&P Global, the Vietnam Manufacturing Purchasing Managers' Index (PMI) slid to 51.2 in July from 54.0 in June. The PMI findings point to the possibility of a further expansion in Vietnam's manufacturing operations in future months; however, the growth rate could decelerate as a result of lower global demand. Nevertheless, easing input cost inflation could reduce firms’ difficulties to some extent. 

Retail sales recorded a strong rebound. Retail sales of goods & services rose 2.4% MoM and soared 42.6% YoY in July. In 7M 2022, total retail sales increased 16% YoY in nominal terms and 11.9% YoY in real terms vs respective declines of 0.3% and 1.8% in 7M 2021.  We expect overall retail sales growth to remain robust in the coming months given the low base in Q3 2021, improving labor market and strong recovery of the tourism sector. In addition, domestic petroleum prices recently dropped, which could support the Government in controlling inflation and support consumer confidence.

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